Exam 8: Government Regulation of Insurance

An insurance company chartered in another country has been licensed to operate in your state.In your state,the insurer would be considered a(n)

The number of title insurance companies operating in State Z is relatively low.Recently,the largest of these companies (50 percent market share)acquired the second largest company (30 percent market share).Immediately after the acquisition,the insurer raised premiums by 75 percent.This scenario demonstrates which of the following rationales for the regulation of insurance?

Which of the following statements about state insurance guaranty funds is (are)true? I.They limit the amount that policyholders can collect if an insurer becomes insolvent. II.They are usually funded by general revenues of the states.

To correct abuses in the financial services industry,Congress passed an Act in 2010 that included numerous provisions to reform the financial services industry.This Act was the

Under what type of rate regulation are insurers required to obtain approval of rates before using them if the rate change exceeds a specified predetermined range?

The basis for current state regulation of insurance is

XYZ Mutual Insurance Company has total assets of $10 million.The policyholders' surplus is $2 million.What are XYZ Mutual's total liabilities?

Which of the following is a method used to help ensure the solvency of insurers?

Which of the following statements about premium taxes is (are)true? I.They are levied by the federal government as a result of the McCarran-Ferguson Act. II.Their primary purpose is to provide funds for insurance regulation.

A shortcoming of state regulation of insurance found by Congressional committees and the General Accounting Office is that state regulation

Which of the following is an advantage of state regulation of insurance over federal regulation of insurance?

State X's premium tax rate is 2 percent.State Y's premium tax rate is 3 percent.State X insurers are required to pay the 3 percent rate on business written in State Y.State X requires insurers from State Y to pay a 3 percent premium tax on business written in State X,even though the premium tax rate is only 2 percent in State X.This practice is known as a

The policyholders' surplus of an insurer is defined as the difference between its

Under one type of rate regulation,insurers do not have to register their rates with state regulatory authorities.However,insurers may be required to furnish rate schedules and supporting data to state officials.A fundamental assumption underlying this type of rating law is that market forces will determine the price and availability of insurance,rather than discretionary acts of regulators.This type of rate regulation is called

Which of the following statements concerning the proposed optional federal charter for life insurers is (are)true? I.Large insurers operating in many states would more likely prefer a state charter while smaller,regional,insurers would more likely choose a federal charter. II.Proponents of the federal charter argue that it would speed the development and approval of new products.

The regulation of insurers in areas that affect consumers,which include claims handling,underwriting,complaints,advertising,sales practices,and other trade practices is called

Under one type of rating law,insurers are free to change rates and to use modified rates immediately.However,the new rate must be filed with regulators within a specified period,such as 60 days after the modified rate is employed.This type of rating law is called

A score derived from an individual's credit history and other factors that is used by many auto and homeowners insurers for underwriting and rating purposes is called a(n)

Which of the following statements about the licensing of insurance companies is (are)true? I.A new capital stock insurer must meet minimum capital and surplus requirements,which vary by state and line of insurance. II.The licensing requirements for insurance companies are less stringent than those imposed on most other types of firms.

Reasons for regulation of insurance include which of the following? I.Maintaining insurer solvency II.Ensuring reasonable rates